DOJ Will Not Modify Music Licensing Agreements

WASHINGTON (Reuters) - The Justice Department said on Thursday that it will not alter agreements that it reached with ASCAP and BMI, music licensing giants, in 1941 that established how music is licensed.

The department also said that the consent decrees require the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc (BMI) to offer "full-work" licenses that convey to radio and television stations, bars, restaurants, digital music services, and other music users the right to publicly perform, without risk of copyright infringement, all works in ASCAP’s and BMI’s catalogs.

ASCAP had opposed “full work” licenses.

ASCAP represents artists like Beyonce, Billy Joel, Katy Perry and Hans Zimmer while BMI is home to Willie Nelson, Carlos Santana, Rihanna and others.

The department had agreed in 2014 to reconsider the consent decrees, which were originally reached in 1941, to take into account changes that have come with the rise of music streaming services like Pandora Media Inc.

ASCAP and BMI, which license about 90 percent of music heard on online services, in movies, TV shows and bars, had hoped to modify the consent decrees to replace "rate courts," which are based in the U.S. District Court for the Southern District of New York, with arbitration.

A rate court handles disputes when ASCAP or BMI cannot reach an agreement on price with a client.

The Justice Department announced in 2014 that it was reviewing the consent decrees with two songwriter groups: the American Society of Composers, Authors and Publishers, known as ASCAP; and Broadcast Music Inc., known as BMI. ASCAP and BMI asked for the review after court battles with Pandora over royalty payments.

ASCAP and BMI represent songwriters, composers and publishers, and the consent decrees cover payments made to songwriters whenever works are played on formats including radio, television, live performances and digital outlets. Publishers like Sony/ATV wanted the agreements modified to allow publishers to “partially withdraw” from Ascap and BMI, so that individual performance licenses could be negotiated directly with service providers like Pandora. Pandora, the world’s largest online music service, opposed that change.

According to Bloomberg, ASCAP and BMI said they would challenge the decision in court. “The DOJ’s interpretation of our consent decree serves no one, not the marketplace, the music publishers, the music users, and most importantly, not our songwriters and composers who now have the government weighing in on their creative and financial decisions,” said Mike O’Neill, the chief executive officer of BMI.

Sony/ATV’s chief executive officer, Martin Bandier, called the decision “misguided.”

“Instead of modernizing the consent decrees, this decision has created a host of problems that will now have to be addressed by the courts and must be addressed by Congress as well,” Bandier said in a statement.

The National Music Publishers’ Association, a trade group for music publishers and songwriters, called the Justice Department decision “disastrous.” “The department ignored the voices of copyright experts, members of Congress and thousands of songwriters and delivered a huge gift to tech companies who already benefit from egregiously low rates,” the organization’s chief executive officer, David Israelite, said in a written statement.